Grid operator braces for a hot Texas summer with low power reserves

Workers in in the control room of the Electric Reliability Council of Texas, which operates most of the state's power grid, must keep a balance between electric generation and demand to prevent transmission lines from overloading. (Ryan Holeywell/Houston Chronicle) less

Workers in in the control room of the Electric Reliability Council of Texas, which operates most of the state's power grid, must keep a balance between electric generation and demand to prevent transmission ... more

Photo: Ryan Holeywell / Houston Chronicle

Photo: Ryan Holeywell / Houston Chronicle

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Workers in in the control room of the Electric Reliability Council of Texas, which operates most of the state's power grid, must keep a balance between electric generation and demand to prevent transmission lines from overloading. (Ryan Holeywell/Houston Chronicle) less

Workers in in the control room of the Electric Reliability Council of Texas, which operates most of the state's power grid, must keep a balance between electric generation and demand to prevent transmission ... more

Photo: Ryan Holeywell / Houston Chronicle

Grid operator braces for a hot Texas summer with low power reserves

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Texas’ electricity grid operator expects the state’s power demand to hit an all-time high this summer, possibly requiring customers to reduce power consumption and triggering emergency measures to keep electricity flowing through the grid.

The Electric Reliability Council of Texas, which oversees 90 percent of the state’s grid, estimates that it will have just enough power to meet electricity demand this summer, according to its summer power demand forecast released Thursday. But following the shutdown of three of the state’s largest coal-fired power plants, planned outages and project delays, the state’s summer power reserves are at their lowest in more than a decade.

The tight supplies are expected to increase wholesale electricity prices, a boon for the state’s merchant power companies. Retail customers in Texas will eventually feel the impact in the form of higher electricity bills, but it is too soon to know when those bills might climb or by how much.

ERCOT's most recent projection estimates that peak demand this summer will reach nearly 73,000 megawatts, well above the record off 71,110 megawatts set in August 2016. One megawatt is enough to power 200 homes on a hot Texas day.

In 2010, ERCOT adopted guidelines calling for the grid's generating capacity to exceed demand by at least 13.75 percent. The excess generating capacity is called the reserve margin. ERCOT's forecasts for the summer of 2018 show that the reserve margin will fall to 9.3 percent, the lowest since 2007. ERCOT has said that fluctuations in reserve margins are not uncommon, and more generating capacity expected to come online by 2019.

In the meantime, ERCOT expects to ask customers to raise their thermostats and cut power consumption when the heat hits, a move the grid operator made in 2011 during a blistering summer when the state set another all-time record for power demand. But if those measures don’t work, ERCOT’s next step would typically be to cut off power to large customers — such as industrial plants — or take power from other grids in the region.

ERCOT can also trigger planned rolling outages, said Pete Warnken, the grid operator’s manager of resource adequacy. But, he added, “We don’t anticipate taking extreme measures — such as occurring outages — based on the current information we have.”

ERCOT envisions a few scenarios that could strain its narrow power reserves and even exceed them, including extreme heat, numerous plant outages or low wind energy production. If any of those scenarios were to happen, ERCOT would not have enough power to meet demand, according to the report. The chance of power plant outages only increase under the combination of deferred maintenance and the stress of running full-tilt.

Unlike most other states with deregulated power markets, Texas does not provide incentives for power companies to keep spare generating capacity at the ready to meet peak demand. But even after enduring a summer of power shortages in 2011, state lawmakers have rejected proposals that would require the state to pay companies to keep plants on deck, said Ed Hirs, an energy economist with the University of Houston.

Texas has managed to skirt power shortage issues, added Hirs, because the state had an over abundance of power capacity. But the coal plants’ shutdown has rapidly tipped the scales.

“The Legislature has not moved on this. They have been forewarned. The writing has been on the wall for years,” said Hirs. “We’ve seen it in California and we’ve seen it in the Northeast, and now we are going to see it in Texas.”